As with any business, the viability of medical related businesses require effective practices for the collection of payments for the goods and services it sells. The medical industry is unique, however, in that it is paid, primarily, by the patients insurers or third-party payers such as Medicare. Unfortunately, satisfying the requirements of any particular insurance company is typically a complex affair that differs from one insurance company to another.
Insurers and entitlement programs, such as Medicare, hereafter referred to as a third-party payers, may require vast numbers of forms and procedures to obtain payment for certain services performed or products sold to patients insured or serviced by these third-party payers. Also, a third-party payer may pay only a percentage or stated amount for a particular service or medical product. The third-party payers may provide an electronic record or file, such as an Electronic Remittance Notice (“ERN”), that details payments made by the third-party payers to a particular healthcare provider in response to one or more claims or requests made by the healthcare provider detailing the products and services the healthcare provider has rendered to patients serviced by the third-party payers. The ERN may detail the payment(s) being made for particular procedures, which may include goods, services, medical procedures, medical equipment and supplies (“medical products” or “procedures”) rendered by the healthcare provider, and other information, such as date and patient identifying information, healthcare provider identifier information, date information, procedure information, denial/allowance information, and additional financial information or payment information. Whenever a claim is denied, the ERN also provides detailed reasons and/or codes detailing the denial.
Unfortunately, third-party payer reimbursements are not entirely consistent for any particular medical product or procedure. For example, one healthcare provider may be reimbursed for a procedure, while another healthcare provider may be denied or reimbursed a lower amount for the same procedure. In some instances, this may be based on the claims procedures or claim requests employed by the healthcare provider or based on the unpredictability of third-party payer's reimbursement policies. In either case, the current process is frustrating and financially detrimental to the healthcare provider.